An article on Sys Con explains that a gap is occurring between ARPU (average revenue per user) and OPEX for service providers because much of the content delivered via service provider networks to endpoints of all kinds is not owned by the service provider. The network simply allows data to pass through without generating revenue yet still needs to manage it, which increases OPEX and in some cases CAPEX as service providers scramble to scale along with the growth in data flowing to their customers.
“Service providers increase revenue by providing new services – usually in a subscription model. But current conditions and usage patterns are such that new services won’t necessarily raise the ARPU because what’s causing the increase in costs is simply data. Lots and lots of data. So if a service provider can’t necessarily offer new services such that they can equalize ARPU with OPEX, what can they do?
Right. Decrease OPEX and CAPEX to bring it more in line with ARPU – hopefully lower to achieve a positive ARPU:costs ratio.”